UK government debt highest since 1962

Government borrowing was higher than expected in June, according to the latest official figures.

Borrowing – the difference between public sector spending and income from taxes – was £14.5bn, down £3.2bn from the year before and the lowest figure for June since 2019.

However, the figure was about £3bn more than economists had forecast.

The total amount of government debt remains at levels last seen in the early 1960s, the Office for National Statistics (ONS) said.

Total debt - which is the overall amount of money owed by the government that has built up over years - was the equivalent of 99.5% of the size of the UK's economy as measured by gross domestic product (GDP).

ONS chief economist Grant Fitzner said the fall in June's borrowing figure reflected "a fall in spending, thanks to lower debt interest payments and the ending of energy support schemes, as well as higher tax revenues".

Debt interest payments have decreased as some are linked to the rate of inflation, which has fallen over the past year.

However, June's borrowing figure was higher than the £11.6bn that had been predicted by the government's independent forecaster, the Office for Budget Responsibility.

“Weaker than expected borrowing so far this year will serve as a reminder to the new chancellor of the huge fiscal challenge she faces ahead of her first Budget this autumn," said Cara Pacitti, senior economist at the Resolution Foundation.